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- Dec 30, 2010
[h3]By JOANN S. LUBLIN And SPENCER E. ANTE [/h3]
Sprint Nextel Corp. will begin selling the iPhone 5 in mid-October, people familiar with the matter said, closing a huge hole in the No. 3 U.S. carrier's lineup and giving Apple Inc. another channel for selling its popular phone.
The timing, however, indicates Apple's new iPhone will hit the market later than expected and too late to contribute to sales in the company's fiscal fourth quarter, which ends in September. Most observers had expected the device to arrive next month.
Top U.S. carrier Verizon Wireless and No. 2 AT&T Inc. will begin selling the phone in mid-October as well, two of the people said. Sprint had more than 52 million subscribers at the end of the second quarter, compared with 106 million for Verizon and nearly 99 million for AT&T.
Landing the iPhone is a big win for Sprint, whose results have suffered without being able to sell the iconic device. This February, Verizon Wireless began selling the iPhone 4, while AT&T has relied on versions of the Apple device to drive sales since 2007.
In the second quarter, Sprint blamed a decline in its contract subscribers on more pronounced "competitive head winds," most prominently, "the first full quarter both major competitors offered the iPhone."
Sprint will also carry the iPhone 4, starting at the same time, one person familiar with the situation said.
Richard Doherty, director of the research firm Envisioneering Group, said that the addition of the iPhone would help Sprint to retain many of its customers who want to upgrade to the popular device. The iPhone will also increase foot traffic in Sprint stores, which should help the company to sell high-margin iPhone accessories.
"Sprint needs it," said Mr. Doherty. "There are a lot of families that will embrace the iPhone."
The cellphone business is increasingly driven by hot smartphones, which are growing more sophisticated and expensive. Apple commanded an average of more than $650 apiece for its iPhones last quarter. Carriers subsidize the difference between that cost and the phone's $199 or $299 retail price, hoping to make up the difference with the data plans they sell over the course of two-year contracts customers must sign to get the subsidy.
Apple created additional leverage for itself by signing exclusive deals when it first launched the iPhone in 2007. In recent years, the company has changed strategy, inking deals with multiple carriers in countries around the world.
The new iPhone is expected to be similar to the current iPhone 4, but thinner and lighter with an improved digital camera and a new more sophisticated operating system.
Apple said in June that a new version of its mobile operating system would be available this fall, leading many analysts to conclude that an upgraded iPhone would be introduced at the same time. On a July earnings conference call, Apple Chief Financial Officer Peter Oppenheimer said the company's September quarter would be affected by "a future product transition that we are not going to talk about today," increasing anticipation.
While Apple unveiled the iPhone 4 at its June developers' conference last year, its successor wasn't ready in time for this year, according to a person briefed on Apple's product plans. The company then aimed to launch a new iPhone by the end of September, though two people familiar with the situation previously told The Wall Street Journal that the phone could be delayed again if its contract manufacturer couldn't improve its production yield rate.
Sprint, fighting to turn itself around after its disastrous merger with Nextel last decade, has managed to stem subscriber defections and improve customer service. But it has disappointed investors by failing to add new subscribers more quickly, in part because it competes with rivals that carry Apple's fast-selling phone.
Verizon Wireless, which cracked AT&T's exclusive U.S. hold on the iPhone this year, has sold 4.5 million of the Apple devices in the first half of 2011. AT&T, which is also able to sell a cheaper prior version of the iPhone, has sold 7.2 million this year.
Read more: http://online.wsj.com/article/SB10001424053111903327904576526690675657466.html#ixzz1VsxutYlk
In October. Who's switching over?
Sprint Nextel Corp. will begin selling the iPhone 5 in mid-October, people familiar with the matter said, closing a huge hole in the No. 3 U.S. carrier's lineup and giving Apple Inc. another channel for selling its popular phone.
The timing, however, indicates Apple's new iPhone will hit the market later than expected and too late to contribute to sales in the company's fiscal fourth quarter, which ends in September. Most observers had expected the device to arrive next month.
Top U.S. carrier Verizon Wireless and No. 2 AT&T Inc. will begin selling the phone in mid-October as well, two of the people said. Sprint had more than 52 million subscribers at the end of the second quarter, compared with 106 million for Verizon and nearly 99 million for AT&T.
Landing the iPhone is a big win for Sprint, whose results have suffered without being able to sell the iconic device. This February, Verizon Wireless began selling the iPhone 4, while AT&T has relied on versions of the Apple device to drive sales since 2007.
In the second quarter, Sprint blamed a decline in its contract subscribers on more pronounced "competitive head winds," most prominently, "the first full quarter both major competitors offered the iPhone."
Sprint will also carry the iPhone 4, starting at the same time, one person familiar with the situation said.
Richard Doherty, director of the research firm Envisioneering Group, said that the addition of the iPhone would help Sprint to retain many of its customers who want to upgrade to the popular device. The iPhone will also increase foot traffic in Sprint stores, which should help the company to sell high-margin iPhone accessories.
"Sprint needs it," said Mr. Doherty. "There are a lot of families that will embrace the iPhone."
The cellphone business is increasingly driven by hot smartphones, which are growing more sophisticated and expensive. Apple commanded an average of more than $650 apiece for its iPhones last quarter. Carriers subsidize the difference between that cost and the phone's $199 or $299 retail price, hoping to make up the difference with the data plans they sell over the course of two-year contracts customers must sign to get the subsidy.
Apple created additional leverage for itself by signing exclusive deals when it first launched the iPhone in 2007. In recent years, the company has changed strategy, inking deals with multiple carriers in countries around the world.
The new iPhone is expected to be similar to the current iPhone 4, but thinner and lighter with an improved digital camera and a new more sophisticated operating system.
Apple said in June that a new version of its mobile operating system would be available this fall, leading many analysts to conclude that an upgraded iPhone would be introduced at the same time. On a July earnings conference call, Apple Chief Financial Officer Peter Oppenheimer said the company's September quarter would be affected by "a future product transition that we are not going to talk about today," increasing anticipation.
While Apple unveiled the iPhone 4 at its June developers' conference last year, its successor wasn't ready in time for this year, according to a person briefed on Apple's product plans. The company then aimed to launch a new iPhone by the end of September, though two people familiar with the situation previously told The Wall Street Journal that the phone could be delayed again if its contract manufacturer couldn't improve its production yield rate.
Sprint, fighting to turn itself around after its disastrous merger with Nextel last decade, has managed to stem subscriber defections and improve customer service. But it has disappointed investors by failing to add new subscribers more quickly, in part because it competes with rivals that carry Apple's fast-selling phone.
Verizon Wireless, which cracked AT&T's exclusive U.S. hold on the iPhone this year, has sold 4.5 million of the Apple devices in the first half of 2011. AT&T, which is also able to sell a cheaper prior version of the iPhone, has sold 7.2 million this year.
Read more: http://online.wsj.com/article/SB10001424053111903327904576526690675657466.html#ixzz1VsxutYlk
In October. Who's switching over?
